By Kira McCaffrey Brecht
Chicago, June 25 (BridgeNews) - Elliott Wave patterns favor buying the euro/sterling cross, which hint that a 14-month basing formation is nearly completed, said Peter Rehmer, chief currency strategist with Elliott Wave International.
Rehmer pointed to the five wave move off the May 31 low and said a three wave correction off that rally was nearly finished. In the bigger picture, he expects a large third wave rally to take euro/sterling sharply higher in the weeks ahead. Fundamentally, the wave patterns correlate with the desire of British politicians and manufacturers for the pound to fall in order to join with the euro, he said.
The parameters of Rehmer's recommendations are as follows:
TARGET STOP Buy cash euro/sterling at 0.6060 0.7200 0.6020*
If Rehmer's trade is triggered and the objective is met at 0.7200, the profit would be 18.8%, or $18,800 for each $100,000 investment. If the trade is stopped out at 0.6015, the loss would be 0.74%, equal to $740 for each $100,000 investment.
Note: BridgeNews takes no responsibility for gains or losses on investments based on this report. The risk in trading can be substantial and investors should fully consider whether such trading is suitable in light of their financial condition. End